Portillo’s Inc. (“Portillo’s” or the “Company”) (NASDAQ: PTLO), the
fast-casual restaurant concept known for its menu of Chicago-style
favorites, today reported financial results for the third quarter
ended September 24, 2023.
Michael Osanloo, President and Chief Executive Officer of
Portillo’s, said, “We delivered another quarter of profitable
growth, highlighting the strength of our brand. Our new restaurants
continue to perform well, and we’re delivering solid results. With
our consistent restaurant operations and ongoing execution of a
disciplined development strategy, we feel great about our future.
We’re a growth company. We will continue to build fantastic
restaurants, staffed with our amazing Team Members who create an
unrivaled experience for our guests. It’s that experience that sets
Portillo’s apart and keeps guests coming back.”
Financial Highlights for the Third Quarter 2023 vs.
Third Quarter 2022:
- Total revenue increased 10.4% or $15.7 million to $166.8
million;
- Same restaurant sales increased 3.9%;
- Operating income increased $4.5 million to $15.1 million;
- Net income increased $3.3 million to $6.5 million;
- Restaurant-Level Adjusted EBITDA* increased $7.8 million to
$41.9 million; and
- Adjusted EBITDA* increased $5.7 million to $27.3 million.
*Adjusted EBITDA and Restaurant-Level Adjusted EBITDA are
non-GAAP measures. Please see definitions and the reconciliations
of these non-GAAP measures in the accompanying financial
information below.
Recent Developments and Trends
In the quarter ended September 24, 2023, we saw continued
revenue growth and same restaurant sales growth. Total revenue grew
10.4% during the quarter ended September 24, 2023 and 12.8% for the
three quarters ended September 24, 2023. Same-restaurant sales grew
3.9% during the quarter ended September 24, 2023, compared to 5.8%
same-restaurant sales growth during the same quarter in 2022.
Same-restaurant sales grew 6.1% during the three quarters ended
September 24, 2023, compared to 5.2% same-restaurant sales growth
during the three quarters ended September 25, 2022.
We believe unit growth is a key driver of shareholder value
creation. During the quarter ended September 24, 2023, we opened
two new restaurants, one restaurant in Arizona and our second
location in Texas for a total of 78 restaurants, including a
restaurant owned by C&O, of which Portillo's owns 50% of the
equity. The one restaurant opened in the fourth quarter of 2022 and
six restaurants opened during the three quarters ended September
24, 2023 positively impacted revenues by approximately
$11.0 million and $31.5 million in the quarter and three
quarters ended September 24, 2023, respectively. We opened one
restaurant subsequent to September 24, 2023 and plan to open five
additional restaurants in the fourth quarter of 2023.
In the quarter and three quarters ended September 24, 2023, we
continued to see commodity inflation stabilize. Commodity inflation
was 3.5% and 5.8% for the quarter and three quarters ended
September 24, 2023, respectively, compared to 15.4% for both the
quarter and three quarters ended September 25, 2022. For the
quarter and three quarters ended September 24, 2023, we experienced
a decline in labor expenses, as a percentage of revenue, compared
to the quarter and three quarters ended September 25, 2022
primarily due to increases in revenue, partially offset by
decreases in transactions, higher labor utilization and additional
wage investments. During mid-January 2023 and at the beginning of
May 2023, we increased certain menu prices to reflect a net
approximate 2.0% and 3.0% price increase, respectively, to continue
to combat inflationary cost pressures and progress towards our goal
to improve Restaurant-Level Adjusted EBITDA margins for fiscal
2023. We will continue to monitor our cost pressures, the
competitive landscape as well as consumer sentiment to inform our
pricing decisions in the coming quarters.
In the quarter ended September 24, 2023, operating income margin
and Restaurant-Level Adjusted EBITDA Margin improved versus prior
year. We believe this improvement was the result of our ongoing
efforts to deploy strategic pricing actions, elevate guest
experiences, and implement operational efficiencies. The strength
of our brand, the consistency of our operations, and the ongoing
execution of a disciplined development strategy all support our
business model. Further, we intend to continue to develop
shareholder value through self-funded restaurant development and an
ongoing focus on operations.
Review of Third Quarter 2023 Financial
Results
Revenues for the quarter ended September 24, 2023 were $166.8
million compared to $151.1 million for the quarter ended September
25, 2022, an increase of $15.7 million or 10.4%. The increase in
revenues was primarily attributed to the opening of one restaurant
in the fourth quarter of 2022 and six restaurants during the three
quarters ended September 24, 2023 combined with an increase in our
same-restaurant sales. New restaurants positively impacted revenues
by approximately $11.0 million in the quarter ended September
24, 2023. Same-restaurant sales increased 3.9% during the third
quarter ended September 24, 2023, which was attributable to an
increase in average check of 7.4%, partially offset by a 3.5%
decrease in transactions. The higher average check was driven by an
approximate 9.1% increase in certain menu prices partially offset
by product mix. For the purpose of calculating same-restaurant
sales for September 24, 2023, sales for the 66 restaurants that
were open for at least 24 full fiscal periods were included in the
Comparable Restaurant Base (as defined in "Selected Operating Data"
below).
Total restaurant operating expenses for the third quarter ended
September 24, 2023 were $124.9 million compared to $117.0 million
for the third quarter ended September 25, 2022, an increase of $7.9
million or 6.7%. The increase in restaurant operating expenses was
driven by the opening of one restaurant in the fourth quarter of
2022 and six restaurants during the three quarters ended September
24, 2023. Additionally, labor expense increases were also driven by
incremental investments to support our team members, including
annual rate increases, and higher variable-based compensation.
Food, beverage and packaging costs were negatively impacted by a
3.5% increase in commodity prices, partially offset by lower
third-party delivery commissions. Operating expenses increased due
to an increase in credit card fees, utilities, and insurance.
General and administrative expenses for the quarter ended
September 24, 2023 were $18.9 million compared to $18.1 million for
the quarter ended September 25, 2022, an increase of $0.8 million
or 4.6%. This increase was primarily driven by increases in
salaries, wages and benefits attributable to annual rate increases
and the filling of open positions, partially offset by a decrease
in professional fees and insurance expenses.
Operating income for the quarter ended September 24, 2023 was
$15.1 million compared to $10.6 million for the quarter ended
September 25, 2022, an increase of $4.5 million or 42.6% due to the
aforementioned increase in revenues, partially offset by the
aforementioned increases in expenses and higher pre-opening
expenses.
Net income for the third quarter ended September 24, 2023 was
$6.5 million compared to net income of $3.2 million for the third
quarter ended September 25, 2022, an increase of $3.3 million or
104.7%. The increase in net income was primarily due to the
aforementioned increase in operating income, decrease in interest
expense of $0.5 million and an increase in interest income of $0.1
million partially offset by an increase in income tax expense of
$1.6 million and a decrease in the Tax Receivable Agreement
liability adjustment of $0.2 million. The $0.5 million decrease in
interest expense was primarily driven by the improved lending terms
associated with our 2023 Term Loan and 2023 Revolver Facility.
Restaurant-Level Adjusted EBITDA* for the third quarter ended
September 24, 2023 was $41.9 million compared to $34.1 million for
the third quarter ended September 25, 2022, an increase of $7.8
million or 22.9%.
Adjusted EBITDA* for the third quarter ended September 24, 2023
was $27.3 million compared to $21.6 million for the third quarter
ended September 25, 2022, an increase of $5.7 million or 26.2%.
*A reconciliation of Restaurant-Level Adjusted EBITDA and
Adjusted EBITDA and the nearest GAAP financial measure is included
under “Non-GAAP Financial Measures” in the accompanying financial
information below.
Development Highlights
During the three quarters ended September 24, 2023, we opened a
total of six restaurants in the Arizona, Florida, and Texas
markets. Subsequent to September 24, 2023, we opened one additional
restaurant, bringing our total restaurant count to 79, including a
restaurant owned by C&O of which Portillo’s owns 50% of the
equity.
Below are the restaurants opened since the beginning of fiscal
2023:
|
Location |
Opening Date |
|
Kissimmee, Florida |
December 2022 |
| The Colony, Texas |
January 2023 |
| Tucson, Arizona |
February 2023 |
| Gilbert, Arizona |
March 2023 |
| Queen Creek, Arizona |
August 2023 |
| Allen, Texas |
August 2023 |
| Cicero, Illinois |
October 2023 |
Retirement of Richard K. Lubin from the Board of
Directors
Richard K. Lubin notified the Company’s Board of Directors
(“Board”) of his intent to retire from the Board and Compensation
Committee on October 30, 2023. His decision to retire from the
Board is consistent with his decision earlier this year to
transition to a senior advisory role at Berkshire Partners LLC.
Mr. Lubin has been a member of the Board since 2014, when
Berkshire Partners LLC acquired the Company. The Company and the
Board would like to thank Mr. Lubin for his many important
contributions and his commitment to the Company during his tenure
on the Board. Osanloo spoke highly of Lubin, noting “Richard has
been such an asset to Portillo’s. He is a great thought partner and
overall terrific person, and I appreciate all he’s done during his
time here to support the Company. He certainly leaves some big
shoes to fill. We wish him all the best as he begins this new
chapter.”
The following definitions apply to these terms as used
in this release:
Same-Restaurant Sales - The change in
same-restaurant sales is the percentage change in year-over-year
revenue (excluding gift card breakage) for the Comparable
Restaurant Base, excluding a restaurant that is owned by C&O.
The Comparable Restaurant Base is defined as the number of
restaurants open for at least 24 full fiscal periods. As of
September 24, 2023 and September 25, 2022, there were 66 and 61
restaurants in our Comparable Restaurant Base, respectively.
A change in same-restaurant sales growth is the result of a
change in restaurant transactions, average guest check, or a
combination of the two. We gather daily sales data and regularly
analyze the guest transaction counts and the mix of menu items sold
to strategically evaluate menu pricing and demand. Measuring our
same-restaurant sales growth allows management to evaluate the
performance of our existing restaurant base. We believe this
measure provides a consistent comparison of restaurant sales
results and trends across periods within our core, established
restaurant base, unaffected by results of restaurant openings and
enables investors to better understand and evaluate the Company’s
historical and prospective operating performance.
Average Unit Volume (“AUV”) - AUV is the total
revenue (excluding gift card breakage) recognized in the Comparable
Restaurant Base, including a restaurant that is owned by C&O,
divided by the number of restaurants in the Comparable Restaurant
Base, including C&O, by period.
This key performance indicator allows management to assess
changes in consumer spending patterns at our restaurants and the
overall performance of our restaurant base.
Adjusted EBITDA and Adjusted EBITDA Margin -
Adjusted EBITDA represents net income (loss) before depreciation
and amortization, interest expense, interest income and income
taxes, adjusted for the impact of certain non-cash and other items
that we do not consider in our evaluation of ongoing core operating
performance as identified in the reconciliation of net income
(loss), the most directly comparable GAAP measure to Adjusted
EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a
percentage of revenues, net. See also “Non-GAAP Financial
Measures.”
Restaurant-Level Adjusted EBITDA and Restaurant-Level
Adjusted EBITDA Margin - Restaurant-Level Adjusted EBITDA
is defined as revenue, less restaurant operating expenses, which
include food, beverage and packaging costs, labor expenses,
occupancy expenses and other operating expenses. Restaurant-Level
Adjusted EBITDA excludes corporate level expenses and depreciation
and amortization on restaurant property and equipment.
Restaurant-Level Adjusted EBITDA Margin represents Restaurant-Level
Adjusted EBITDA as a percentage of revenues, net. See also
“Non-GAAP Financial Measures.”
For more information about the Company’s Non-GAAP measures, how
they are calculated and reconciled and why management believes that
they are useful, see “Non-GAAP Financial Measures” below.
Earnings Conference Call
The Company will host a conference call to discuss its financial
results for the third quarter ended September 24, 2023 on Thursday,
November 2, 2023, at 10:00 AM ET. The conference call can be
accessed live over the phone by dialing 1-877-407-3982 (toll-free)
or 1-201-493-6780 (international). A telephone replay will be
available shortly after the call has concluded and can be accessed
by dialing 1-412-317-6671; the passcode is 13737543. The webcast
will be available at www.portillos.com under the investors section
and will be archived on the site shortly after the call has
concluded.
About Portillo’s
In 1963, Dick Portillo invested $1,100 into a small trailer to
open the first Portillo’s hot dog stand in Villa Park, IL, which he
called “The Dog House.” Years later, Portillo’s (NASDAQ: PTLO) has
grown to more than 70 restaurants across 10 states. Portillo’s is
best known for its Chicago-style hot dogs, Italian beef sandwiches,
char-grilled burgers, fresh salads and famous chocolate cake.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of 1995
("PSLRA"). All statements other than statements of historical fact
are forward-looking statements. Forward-looking statements discuss
our current expectations and projections relating to our financial
position, results of operations, plans, objectives, future
performance and business, and are based on currently available
operating, financial and competitive information which are subject
to various risks and uncertainties, so you should not place undue
reliance on forward-looking statements. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as "aim," "anticipate," "believe," "commit,"
"estimate," "expect," "forecast," "outlook," "potential,"
"project," "projection," "plan," "intend," "seek," "may," "could,"
"would," "will," "should," "can," "can have," "likely," the
negatives thereof and other similar expressions.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate to the
future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that we may not
predict. As a result, our actual results may differ materially from
those contemplated by the forward-looking statements, and you
should not unduly rely on these statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include regional, national or global
political, economic, business, competitive, market and regulatory
conditions and the following:
- risks related to or arising from our organizational
structure;
- risks of food-borne illness and food safety and other health
concerns about our food;
- the impact of unionization activities of our restaurant workers
on our operations and profitability;
- the impact of recent bank failures on the marketplace,
including the ability to access credit;
- risks associated with our reliance on certain information
technology systems and potential failures or interruptions;
- privacy and cyber security risks related to our digital
ordering and payment platforms for our delivery business;
- the impact of competition, including from our competitors in
the restaurant industry or our own restaurants;
- the increasingly competitive labor market and our ability to
attract and retain the best talent and qualified employees;
- the impact of federal, state or local government regulations
relating to privacy, data protection, advertising and consumer
protection, building and zoning requirements, costs or ability to
open new restaurants, or sale of food and alcoholic beverage
control regulations;
- inability to achieve our growth strategy, such as the
availability of suitable new restaurant sites in existing and new
markets and opening of new restaurants at the anticipated rate and
on the anticipated timeline;
- the impact of consumer sentiment and other economic factors on
our sales;
- increases in food and other operating costs, tariffs and import
taxes, and supply shortages;
- the potential future impact of COVID-19 (including any variant)
on our results of operations, supply chain or liquidity; and
- other risks identified in our filings with the Securities and
Exchange Commission (the “SEC”).
All forward-looking statements are expressly qualified in their
entirety by these cautionary statements. You should evaluate all
forward-looking statements made in this press release in the
context of the risks and uncertainties disclosed in the Company’s
most recent Annual Report on Form 10-K, filed with the SEC. All of
the Company’s SEC filings are available on the SEC’s website at
www.sec.gov. The forward-looking statements included in this press
release are made only as of the date hereof. The Company undertakes
no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as otherwise required by law.
Investor Contact:Barbara Noverini, CFA
investors@portillos.com
Media Contact:ICR,
Inc.portillosPR@icrinc.com
PORTILLO’S
INCCONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)(in thousands, except share and per share
data)
| |
Quarter Ended |
|
Three Quarters Ended |
| |
September 24, 2023 |
|
September 25, 2022 |
|
September 24, 2023 |
|
September 25, 2022 |
|
REVENUES, NET |
$ |
166,805 |
|
|
100.0 |
% |
|
$ |
151,121 |
|
|
100.0 |
% |
|
$ |
492,047 |
|
|
100.0 |
% |
|
$ |
436,226 |
|
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COST AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food, beverage and packaging costs |
|
55,551 |
|
|
33.3 |
% |
|
|
53,374 |
|
|
35.3 |
% |
|
|
165,407 |
|
|
33.6 |
% |
|
|
151,414 |
|
|
34.7 |
% |
|
Labor |
|
42,588 |
|
|
25.5 |
% |
|
|
39,133 |
|
|
25.9 |
% |
|
|
126,200 |
|
|
25.6 |
% |
|
|
114,352 |
|
|
26.2 |
% |
|
Occupancy |
|
8,210 |
|
|
4.9 |
% |
|
|
7,644 |
|
|
5.1 |
% |
|
|
24,898 |
|
|
5.1 |
% |
|
|
22,778 |
|
|
5.2 |
% |
|
Other operating expenses |
|
18,571 |
|
|
11.1 |
% |
|
|
16,882 |
|
|
11.2 |
% |
|
|
56,107 |
|
|
11.4 |
% |
|
|
47,225 |
|
|
10.8 |
% |
|
Total restaurant operating expenses |
|
124,920 |
|
|
74.9 |
% |
|
|
117,033 |
|
|
77.4 |
% |
|
|
372,612 |
|
|
75.7 |
% |
|
|
335,769 |
|
|
77.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
18,898 |
|
|
11.3 |
% |
|
|
18,059 |
|
|
12.0 |
% |
|
|
57,285 |
|
|
11.6 |
% |
|
|
49,185 |
|
|
11.3 |
% |
|
Pre-opening expenses |
|
2,410 |
|
|
1.4 |
% |
|
|
791 |
|
|
0.5 |
% |
|
|
5,029 |
|
|
1.0 |
% |
|
|
1,770 |
|
|
0.4 |
% |
|
Depreciation and amortization |
|
6,178 |
|
|
3.7 |
% |
|
|
5,289 |
|
|
3.5 |
% |
|
|
17,788 |
|
|
3.6 |
% |
|
|
15,803 |
|
|
3.6 |
% |
|
Net income attributable to equity method investment |
|
(422 |
) |
|
(0.3)% |
|
|
(409 |
) |
|
(0.3)% |
|
|
(1,010 |
) |
|
(0.2)% |
|
|
(807 |
) |
|
(0.2) % |
|
Other income, net |
|
(276 |
) |
|
(0.2)% |
|
|
(228 |
) |
|
(0.2)% |
|
|
(630 |
) |
|
(0.1)% |
|
|
(333 |
) |
|
(0.1) % |
|
OPERATING INCOME |
|
15,097 |
|
|
9.1 |
% |
|
|
10,586 |
|
|
7.0 |
% |
|
|
40,973 |
|
|
8.3 |
% |
|
|
34,839 |
|
|
8.0 |
% |
|
Interest expense |
|
6,573 |
|
|
3.9 |
% |
|
|
7,090 |
|
|
4.7 |
% |
|
|
20,539 |
|
|
4.2 |
% |
|
|
19,286 |
|
|
4.4 |
% |
|
Interest income |
|
(116 |
) |
|
(0.1)% |
|
|
— |
|
|
— |
% |
|
|
(116 |
) |
|
— |
% |
|
|
— |
|
|
— |
% |
|
Tax Receivable Agreement liability adjustment |
|
(528 |
) |
|
(0.3)% |
|
|
(708 |
) |
|
(0.5) % |
|
|
(1,691 |
) |
|
(0.3)% |
|
|
(2,462 |
) |
|
(0.6)% |
|
Loss on debt extinguishment |
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
3,465 |
|
|
0.7 |
% |
|
|
— |
|
|
— |
% |
|
INCOME BEFORE INCOME TAXES |
|
9,168 |
|
|
5.5 |
% |
|
|
4,204 |
|
|
2.8 |
% |
|
|
18,776 |
|
|
3.8 |
% |
|
|
18,015 |
|
|
4.1 |
% |
|
Income tax expense |
|
2,622 |
|
|
1.6 |
% |
|
|
1,006 |
|
|
0.7 |
% |
|
|
3,605 |
|
|
0.7 |
% |
|
|
3,511 |
|
|
0.8 |
% |
|
NET INCOME |
|
6,546 |
|
|
3.9 |
% |
|
|
3,198 |
|
|
2.1 |
% |
|
|
15,171 |
|
|
3.1 |
% |
|
|
14,504 |
|
|
3.3 |
% |
| Net
income attributable to non-controlling interests |
|
2,185 |
|
|
1.3 |
% |
|
|
1,606 |
|
|
1.1 |
% |
|
|
4,536 |
|
|
0.9 |
% |
|
|
7,607 |
|
|
1.7 |
% |
|
NET INCOME ATTRIBUTABLE TO PORTILLO'S INC. |
$ |
4,361 |
|
|
2.6 |
% |
|
$ |
1,592 |
|
|
1.1 |
% |
|
$ |
10,635 |
|
|
2.2 |
% |
|
$ |
6,897 |
|
|
1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per common share
attributable to Portillo's Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
$ |
0.08 |
|
|
|
|
$ |
0.04 |
|
|
|
|
$ |
0.20 |
|
|
|
|
$ |
0.19 |
|
|
|
| Diluted |
$ |
0.07 |
|
|
|
|
$ |
0.04 |
|
|
|
|
$ |
0.19 |
|
|
|
|
$ |
0.17 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
55,127,133 |
|
|
|
|
|
38,899,373 |
|
|
|
|
|
53,231,086 |
|
|
|
|
|
36,899,208 |
|
|
|
| Diluted |
|
58,767,812 |
|
|
|
|
|
42,625,160 |
|
|
|
|
|
56,813,653 |
|
|
|
|
|
40,785,766 |
|
|
|
PORTILLO’S
INC.CONSOLIDATED BALANCE SHEETS
(UNAUDITED)(in thousands, except share and per share
data)
| |
September 24, 2023 |
|
December 25, 2022 |
| ASSETS |
|
|
|
| CURRENT ASSETS: |
|
|
|
|
Cash and cash equivalents and restricted cash |
$ |
12,947 |
|
$ |
44,427 |
|
|
Accounts and tenant improvement receivables |
|
14,962 |
|
|
8,590 |
|
|
Inventory |
|
6,418 |
|
|
7,387 |
|
|
Prepaid expenses |
|
4,798 |
|
|
4,922 |
|
|
Total current assets |
|
39,125 |
|
|
65,326 |
|
|
Property and equipment, net |
|
274,605 |
|
|
227,036 |
|
|
Operating lease assets |
|
191,488 |
|
|
166,808 |
|
|
Goodwill |
|
394,298 |
|
|
394,298 |
|
|
Trade names |
|
223,925 |
|
|
223,925 |
|
|
Other intangible assets, net |
|
29,634 |
|
|
31,800 |
|
|
Equity method investment |
|
16,543 |
|
|
16,274 |
|
|
Deferred tax assets |
|
184,375 |
|
|
150,497 |
|
|
Other assets |
|
3,847 |
|
|
4,119 |
|
|
Total other assets |
|
852,622 |
|
|
820,913 |
|
|
TOTAL ASSETS |
$ |
1,357,840 |
|
$ |
1,280,083 |
|
|
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
Accounts payable |
$ |
33,481 |
|
$ |
30,273 |
|
|
Current portion of long-term debt |
|
7,500 |
|
|
4,155 |
|
|
Current portion of Tax Receivable Agreement liability |
|
6,527 |
|
|
813 |
|
|
Current deferred revenue |
|
4,094 |
|
|
7,292 |
|
|
Short-term operating lease liability |
|
5,048 |
|
|
4,849 |
|
|
Accrued expenses |
|
33,355 |
|
|
29,915 |
|
|
Total current liabilities |
|
90,005 |
|
|
77,297 |
|
| LONG-TERM LIABILITIES: |
|
|
|
|
Long-term debt, net of current portion |
|
287,486 |
|
|
314,425 |
|
|
Tax Receivable Agreement liability |
|
294,950 |
|
|
252,003 |
|
|
Long-term operating lease liability |
|
234,699 |
|
|
200,166 |
|
|
Other long-term liabilities |
|
2,973 |
|
|
3,291 |
|
|
Total long-term liabilities |
|
820,108 |
|
|
769,885 |
|
|
Total liabilities |
|
910,113 |
|
|
847,182 |
|
|
|
|
|
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
| |
|
|
|
| STOCKHOLDER’S EQUITY: |
|
|
|
|
Preferred stock, $0.01 par value per share, 10,000,000 shares
authorized, none issued or outstanding |
|
— |
|
|
— |
|
|
Class A common stock, $0.01 par value per share, 380,000,000 shares
authorized, and 55,182,141 and 48,420,723 shares issued and
outstanding at September 24, 2023 and December 25, 2022,
respectively. |
|
552 |
|
|
484 |
|
|
Class B common stock, $0.00001 par value per share, 50,000,000
shares authorized, and 17,472,926 and 23,837,162 shares issued and
outstanding at September 24, 2023 and December 25, 2022,
respectively. |
|
— |
|
|
— |
|
|
Additional paid-in-capital |
|
305,515 |
|
|
260,664 |
|
|
Retained earnings (accumulated deficit) |
|
5,823 |
|
|
(4,812 |
) |
|
Total stockholders' equity attributable to Portillo's Inc. |
|
311,890 |
|
|
256,336 |
|
|
Non-controlling interest |
|
135,837 |
|
|
176,565 |
|
|
Total stockholders' equity |
|
447,727 |
|
|
432,901 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
1,357,840 |
|
$ |
1,280,083 |
|
PORTILLO’S
INCCONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(in thousands)
| |
Three Quarters Ended |
| |
September 24, 2023 |
|
September 25, 2022 |
| CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
Net income |
$ |
15,171 |
|
|
$ |
14,504 |
|
| Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
17,788 |
|
|
|
15,803 |
|
|
Amortization of debt issuance costs and discount |
|
814 |
|
|
|
1,952 |
|
|
Loss on sales of assets |
|
512 |
|
|
|
212 |
|
|
Equity-based compensation |
|
12,044 |
|
|
|
11,347 |
|
|
Deferred rent and tenant allowance |
|
— |
|
|
|
3,288 |
|
|
Deferred income tax expense |
|
3,605 |
|
|
|
3,511 |
|
|
Tax Receivable Agreement liability adjustment |
|
(1,691 |
) |
|
|
(2,462 |
) |
|
Amortization of deferred lease incentives |
|
— |
|
|
|
(289 |
) |
|
Gift card breakage |
|
(688 |
) |
|
|
(626 |
) |
|
Loss on debt extinguishment |
|
3,465 |
|
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivables |
|
(1,293 |
) |
|
|
(2,064 |
) |
|
Receivables from related parties |
|
(100 |
) |
|
|
(34 |
) |
|
Inventory |
|
969 |
|
|
|
144 |
|
|
Other current assets |
|
124 |
|
|
|
1,666 |
|
|
Operating lease assets |
|
5,685 |
|
|
|
— |
|
|
Accounts payable |
|
(2,777 |
) |
|
|
(1,089 |
) |
|
Accrued expenses and other liabilities |
|
1,023 |
|
|
|
(8,448 |
) |
|
Operating lease liabilities |
|
(1,775 |
) |
|
|
— |
|
|
Deferred lease incentives |
|
1,013 |
|
|
|
1,651 |
|
|
Other assets and liabilities |
|
(319 |
) |
|
|
(97 |
) |
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
53,570 |
|
|
|
38,969 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchase of property and equipment |
|
(57,660 |
) |
|
|
(30,012 |
) |
|
Proceeds from the sale of property and equipment |
|
81 |
|
|
|
44 |
|
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(57,579 |
) |
|
|
(29,968 |
) |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from long-term debt |
|
300,000 |
|
|
|
— |
|
|
Payments of long-term debt |
|
(324,303 |
) |
|
|
(2,493 |
) |
|
Proceeds from equity offering, net of underwriting discounts |
|
179,306 |
|
|
|
183,436 |
|
|
Repurchase of outstanding equity / Portillo's OpCo units |
|
(179,306 |
) |
|
|
(183,436 |
) |
|
Distributions paid to non-controlling interest holders |
|
(399 |
) |
|
|
— |
|
|
Proceeds from stock option exercises |
|
1,321 |
|
|
|
1,722 |
|
|
Employee withholding taxes related to net settled equity
awards |
|
(112 |
) |
|
|
— |
|
|
Proceeds from Employee Stock Purchase Plan purchases |
|
404 |
|
|
|
— |
|
|
Payments of Tax Receivable Agreement liability |
|
(813 |
) |
|
|
— |
|
|
Payment of deferred financing costs |
|
(3,569 |
) |
|
|
— |
|
|
Payment of initial public offering issuance costs |
|
— |
|
|
|
(771 |
) |
|
NET CASH USED IN FINANCING ACTIVITIES |
|
(27,471 |
) |
|
|
(1,542 |
) |
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND
RESTRICTED CASH |
|
(31,480 |
) |
|
|
7,459 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING
OF THE PERIOD |
|
44,427 |
|
|
|
39,263 |
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE
PERIOD |
$ |
12,947 |
|
|
$ |
46,722 |
|
|
|
|
|
|
PORTILLO’S INCSELECTED
OPERATING DATA AND NON-GAAP FINANCIAL MEASURES
| |
Quarter Ended |
|
Three Quarters Ended |
| |
September 24, 2023 |
|
September 25, 2022 |
|
September 24, 2023 |
|
September 25, 2022 |
|
Total Restaurants (a) |
|
78 |
|
|
|
71 |
|
|
|
78 |
|
|
|
71 |
|
| AUV (in millions) (a) |
N/A |
|
|
N/A |
|
|
$ |
8.9 |
|
|
$ |
8.4 |
|
| Change in same-restaurant
sales (b) |
|
3.9 |
% |
|
|
5.8 |
% |
|
|
6.1 |
% |
|
|
5.2 |
% |
| Adjusted EBITDA (in thousands)
(b) |
$ |
27,285 |
|
|
$ |
21,620 |
|
|
$ |
76,140 |
|
|
$ |
66,864 |
|
| Adjusted EBITDA Margin
(b) |
|
16.4 |
% |
|
|
14.3 |
% |
|
|
15.5 |
% |
|
|
15.3 |
% |
| Restaurant-Level Adjusted
EBITDA (in thousands) (b) |
$ |
41,885 |
|
|
$ |
34,088 |
|
|
$ |
119,435 |
|
|
$ |
100,457 |
|
| Restaurant-Level Adjusted
EBITDA Margin (b) |
|
25.1 |
% |
|
|
22.6 |
% |
|
|
24.3 |
% |
|
|
23.0 |
% |
(a) Includes a restaurant that is owned by C&O of which
Portillo’s owns 50% of the equity. AUVs for the quarters ended
September 24, 2023 and September 25, 2022 represent AUVs for the
twelve months ended September 24, 2023 and September 25, 2022,
respectively. Total restaurants indicated are as of a point in
time. (b) Excludes a restaurant that is owned by C&O of which
Portillo’s owns 50% of the equity.
PORTILLO’S INC.NON-GAAP
FINANCIAL MEASURES
To supplement the consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use the
following non-GAAP financial measures: Adjusted EBITDA and Adjusted
EBITDA Margin, and Restaurant-Level Adjusted EBITDA and
Restaurant-Level Adjusted EBITDA Margin. Accordingly, these
measures are not required by, nor presented in accordance with
GAAP, but rather are supplemental measures of operating performance
of our restaurants. You should be aware that these measures are not
indicative of overall results for the Company and that
Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted
EBITDA Margin do not accrue directly to the benefit of stockholders
because of corporate-level expenses excluded from such measures.
These measures are supplemental measures of operating performance
and our calculations thereof may not be comparable to similar
measures reported by other companies. These measures are important
measures to evaluate the performance and profitability of our
restaurants, individually and in the aggregate, but also have
important limitations as analytical tools and should not be
considered in isolation as substitutes for analysis of our results
as reported under GAAP.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents net income before depreciation and
amortization, interest expense, interest income and income taxes,
adjusted for the impact of certain non-cash and other items that we
do not consider in our evaluation of ongoing core operating
performance as identified in the reconciliation of net income
(loss), the most directly comparable GAAP measure to Adjusted
EBITDA. Adjusted EBITDA Margin represents Adjusted EBITDA as a
percentage of revenues, net.
We use Adjusted EBITDA and Adjusted EBITDA Margin (i) to
evaluate our operating results and the effectiveness of our
business strategies, (ii) internally as benchmarks to compare our
performance to that of our competitors and (iii) as factors in
evaluating management’s performance when determining incentive
compensation.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin are
important measures of operating performance because they eliminate
the impact of expenses that do not relate to our core operating
performance.
Restaurant-Level Adjusted EBITDA and Restaurant-Level
Adjusted EBITDA Margin
Restaurant-Level Adjusted EBITDA is defined as revenue, less
restaurant operating expenses, which include food, beverage and
packaging costs, labor expenses, occupancy expenses and other
operating expenses. Restaurant-Level Adjusted EBITDA excludes
corporate level expenses and depreciation and amortization on
restaurant property and equipment. Restaurant-Level Adjusted EBITDA
Margin represents Restaurant-Level Adjusted EBITDA as a percentage
of revenues, net.
We believe that Restaurant-Level Adjusted EBITDA and
Restaurant-Level Adjusted EBITDA Margin are important measures to
evaluate the performance and profitability of our restaurants,
individually and in the aggregate.
See below for a reconciliation of net income, the most directly
comparable GAAP measure, to Adjusted EBITDA and Adjusted EBITDA
Margin (in thousands):
| |
Quarter Ended |
|
Three Quarters Ended |
| |
September 24, 2023 |
|
September 25, 2022 |
|
September 24, 2023 |
|
September 25, 2022 |
|
Net income |
$ |
6,546 |
|
|
$ |
3,198 |
|
|
$ |
15,171 |
|
|
$ |
14,504 |
|
| Depreciation and
amortization |
|
6,178 |
|
|
|
5,289 |
|
|
|
17,788 |
|
|
|
15,803 |
|
| Interest expense |
|
6,573 |
|
|
|
7,090 |
|
|
|
20,539 |
|
|
|
19,286 |
|
| Interest income |
|
(116 |
) |
|
|
— |
|
|
|
(116 |
) |
|
|
— |
|
| Loss on debt
extinguishment |
|
— |
|
|
|
— |
|
|
|
3,465 |
|
|
|
— |
|
| Income tax expense |
|
2,622 |
|
|
|
1,006 |
|
|
|
3,605 |
|
|
|
3,511 |
|
| EBITDA |
|
21,803 |
|
|
|
16,583 |
|
|
|
60,452 |
|
|
|
53,104 |
|
| Deferred rent (1) |
|
1,388 |
|
|
|
1,053 |
|
|
|
3,781 |
|
|
|
2,999 |
|
| Equity-based compensation |
|
4,324 |
|
|
|
3,698 |
|
|
|
12,044 |
|
|
|
11,347 |
|
| ERP implementation costs
(2) |
|
149 |
|
|
|
— |
|
|
|
149 |
|
|
|
— |
|
| Other loss (3) |
|
16 |
|
|
|
114 |
|
|
|
511 |
|
|
|
239 |
|
| Transaction-related fees &
expenses (4) |
|
133 |
|
|
|
880 |
|
|
|
894 |
|
|
|
1,637 |
|
| Tax Receivable Agreement
liability adjustment (5) |
|
(528 |
) |
|
|
(708 |
) |
|
|
(1,691 |
) |
|
|
(2,462 |
) |
| Adjusted EBITDA |
$ |
27,285 |
|
|
$ |
21,620 |
|
|
$ |
76,140 |
|
|
$ |
66,864 |
|
| Adjusted EBITDA Margin
(6) |
|
16.4 |
% |
|
|
14.3 |
% |
|
|
15.5 |
% |
|
|
15.3 |
% |
(1) Represents the difference between cash rent payments and the
recognition of straight-line rent expense recognized over the lease
term. (2) Represents non-capitalized third party consulting and
software licensing costs incurred in connection with the
implementation of a new ERP system.(3) Represents loss on disposal
of property and equipment. (4) Represents the exclusion of certain
expenses that management believes are not indicative of ongoing
operations, consisting primarily of certain professional fees.(5)
Represents remeasurement of the Tax Receivable Agreement
liability.(6) Adjusted EBITDA Margin is defined as Adjusted EBITDA
divided by Revenues, net.
See below for a reconciliation of operating
income, the most directly comparable GAAP measure, to
Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted
EBITDA Margin (in thousands):
| |
Quarter Ended |
|
Three Quarters Ended |
| |
September 24, 2023 |
|
September 25, 2022 |
|
September 24, 2023 |
|
September 25, 2022 |
|
Operating income |
$ |
15,097 |
|
|
$ |
10,586 |
|
|
$ |
40,973 |
|
|
$ |
34,839 |
|
| Plus: |
|
|
|
|
|
|
|
|
General and administrative expenses |
|
18,898 |
|
|
|
18,059 |
|
|
|
57,285 |
|
|
|
49,185 |
|
|
Pre-opening expenses |
|
2,410 |
|
|
|
791 |
|
|
|
5,029 |
|
|
|
1,770 |
|
|
Depreciation and amortization |
|
6,178 |
|
|
|
5,289 |
|
|
|
17,788 |
|
|
|
15,803 |
|
|
Net income attributable to equity method investment |
|
(422 |
) |
|
|
(409 |
) |
|
|
(1,010 |
) |
|
|
(807 |
) |
|
Other (income) loss, net |
|
(276 |
) |
|
|
(228 |
) |
|
|
(630 |
) |
|
|
(333 |
) |
| Restaurant-Level Adjusted
EBITDA |
$ |
41,885 |
|
|
$ |
34,088 |
|
|
$ |
119,435 |
|
|
$ |
100,457 |
|
| Restaurant-Level Adjusted
EBITDA Margin (1) |
|
25.1 |
% |
|
|
22.6 |
% |
|
|
24.3 |
% |
|
|
23.0 |
% |
(1) Restaurant-Level Adjusted EBITDA Margin is defined as
Restaurant-Level Adjusted EBITDA divided by Revenues, net
Portillos (NASDAQ:PTLO)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Portillos (NASDAQ:PTLO)
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